The State Government is continuing its open market borrowings through the auction of securities conducted by the Reserve Bank of India (RBI) at lower interest rates to clear the high interest loans taken by the previous BRS Government.
The Government raised another ₹6,000 crore market borrowings through the RBI on Tuesday, taking the total borrowings for the current financial year past the ₹60,000 crore mark. The Union Finance Ministry has allowed the State to raise borrowings of ₹54,009 crore against the ₹64,539 crore the Telangana Government projected citing financial management issues.
Senior officials said the Government cleared the principal and interest of the ₹30,536 crore raised from the Rural Electrification Corporation (REC) in the process. The loan was raised at a high interest rate of 10.9% and has been cleared fully, thanks to the low interest borrowings opted by the Government. The move to clear the loan, officials said, will result in saving few hundreds of crores to the exchequer.
The loan taken between 2016 and 2019 mandated repayment of principal and interest in 144 instalments from September 2023 to August 2035. The Finance department requested rescheduling of the high interest loans after the Congress Government took over the reins in the State, but the efforts yielded no results.
The Finance department has therefore, decided to swap the high interest loans with lower interest ones, and hence, the increase in borrowings from the RBI with interest rates of around 7.5%.
In the process, the Government could successfully convince the Union Finance Ministry about its efforts to reduce the burden on the exchequer and reportedly secured permission to raise loans over and above the limit fixed for the current fiscal.
“We can say what we have done. We are planning for more loan swapping in future,” a senior Finance department official said when asked about the areas where the fresh loans are expected to be utilised.
Published – December 04, 2025 07:15 pm IST
